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BCM SEPTEMBER 2022 MONTHLY MEETING RECAP
The Business Council of Mongolia (BCM) held a regular Monthly Meeting with the Development Bank of Mongolia (DBM) on 27 September 2022 at the Shangri-La Hotel. The meeting focused on potential solutions to current challenges facing the DBM, such as non-performing loans, debt restructuring, corporate governance, and future business strategies and prospects.
Chair of the BCM Ts.Tumentsogt opening the meeting with a basic introduction to development banks in general and the Development Bank of Mongolia. The five biggest development banks in the world are responsible for around USD 8 trillion in assets, with loans focused mainly on major infrastructure and development projects that regular banks cannot finance. Established 11 years ago, the DBM fills the gap in financing between the private sector and government in Mongolia. From the private sector perspective, businesses want to see more independent, impartial governance, stated Mr. Tumentsogt.
Following some brief opening words by J.Bataa, First Deputy CEO of the DBM, a presentation was given by Ms. S.Murun, Head of the Business Planning and Monitoring Department of the DBM.
S.Murun, Head of the Business Planning and Monitoring Department of the DBM
The DBM has had its ups and downs since its establishment. Shares of the DBM are 100 percent owned by the government. In 2016, a new DBM law was passed, bringing it under the supervision of the Bank of Mongolia.
It has seen repayments of MNT 600 billion since the start of the year, when it was mired in controversy over the high level of non-performing loans (NPLs). Around 55 percent of DBM loans were non-performing at the start of the year, but this has been improving, and is at around 51 percent currently.
The DBM is focusing on three key areas: NPLs, foreign cooperation, and governance. The high level of NPLs must be brought down, foreign cooperation means not letting credit ratings drop and paying back bonds on time, and all-round governance improvement measures are being taken.
For the future, the most important thing for the DBM is independence, stated Ms. Murun. It also aims to improve project monitoring and implement new mechanisms of financing. After the current issues are addressed, the DBM will play the role of an export-import bank in the future.
After the presentation, a panel discussion was held, moderated by BCM Chair Mr. Tumentsogt. On the panel were:
- Mr. O.Amartuvshin, Mongolian National Chamber of Commerce and Industry
- Mr. G.Enkhtaivan, Deputy Governor, Bank of Mongolia
- Mr. N.Manduul, CEO, Development Bank of Mongolia
- Mr. L.Sonor, Head of the Financial Insurance Department, Ministry of Finance
As a vital organization, the DBM is often criticized as well as praised by various parties. A lively discussion was held in which the government, central bank, DBM, and the private sector were represented. One thing that everyone agreed was that there was no question regarding the need for a development bank. A development bank is absolutely necessary when we talk about national development and the economy. As public servants, businesses, NGOs, and other sectors of society see things from different points of view, panelists also agreed that we are all looking at the same issue, but from different angles. So it is essential that we sit down and find a solution that benefits all.
The meeting was adjourned after a Q&A with the audience.
Photos from the meeting can be found from the BCM's Facebook page.
More information can be found from the Editor's notes and presentations linked below.
Links:
- Editor's notes (English)
- Presentation by S.Murun: Activities of the Development Bank of Mongolia (Mongolian)
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